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Some Companies Claim Leaving Russia Is Costly And Complicated; Soon: Zelenskyy And Stoltenberg Speak At NATO Summit; Elias Diaz Leads NL To First All-Star Game Win Since 2012. Aired 5:30-6a ET

Aired July 12, 2023 - 05:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[05:30:00]

CLARE SEBASTIAN, CNN CORRESPONDENT: This is a video that was posted on the telegram page of the (INAUDIBLE). We cannot independently verify this, of course.

They say they found a pistol as well in his home in the Krasnodar region. A pistol, by the way, is something the Ukrainian side -- the Ukrainian defense intelligence, which came out with a lot of details on this case, said was used in the murder.

So this is really murky. Right now, we don't know why he was targeted. His family say he may not have been involved in the special military operation at all.

So we await more on this. But either way, Rahel, this is a hit on a former Russian military figure on Russian soil.

RAHEL SOLOMON, CNN ANCHOR: Clare Sebastian live for us in London. Thank you, Clare.

Time for quick hits around the globe right now.

Eight people have died in Japan after flooding and landslides caused by heavy rain. Fire officials say four people are still missing. Fourteen others are injured.

The White House says that hackers based in China have breached email accounts at two dozen U.S. organizations, including some U.S. government agencies. Microsoft says that the hackers were focused on espionage.

And federal prosecutors charge a U.S.-Israeli citizen Gal Luft with arms trafficking and acting as a Chinese agent. He is the same person that James Comer says is the informant with incriminating information on Hunter Biden.

Well, just ahead for us, a last-minute decision as an actors' strike looms over Hollywood. And the company still doing business in Russia after pledging not to do business in Russia. We'll be right back.

(COMMERCIAL)

[05:35:34]

SOLOMON: And here is today's fast-forward lookahead.

FBI director Christopher Wray testifies before the House Oversight Committee today. It comes amid accusations that the FBI prevented a more thorough investigation of Hunter Biden.

The actors' union SAG-AFTRA and Hollywood studios have agreed to bring in a federal mediator to try to iron out their contract differences. The strike deadline is set for tonight.

And President Biden and President Zelenskyy set to meet on the sidelines of the NATO summit in Lithuania in a short time. Zelenskyy has been notably frustrated over NATO's decision to provide guidance but not a specific timeline on when the alliance will be ready to grant Ukraine membership.

And days after Russia invaded Ukraine, more than 1,000 companies pledged to stop doing business in Russia. But today, a group of researchers is now naming and shaming some well-known firms that say that they have violated that pledge.

CNN's Tom Foreman has more.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): When Russia marched into Ukraine, hundreds of companies from other nations announced plans to march out of Moscow, hitting Vladimir Putin's government in the pocketbook and hobbling his war effort. But one year, 4 1/2 months after the invasion, some others are still doing brisk business in Russia, according to Yale Professor Jeffrey Sonnenfeld.

JEFFREY SONNENFELD, PROFESSOR, YALE SCHOOL OF MANAGEMENT: These are companies that said they were leaving and then reneged -- saying, ah, it's too much trouble. It's wartime profiteering and it is actually aiding, sadly -- helping to fuel Putin's war machine.

FOREMAN (voice-over): This research finds although many companies followed through on their pledges, taking millions of dollars out of Russia, some big players did not.

Among them, Heineken. Sonnenfeld's researchers say the Dutch company has seven facilities in Russia, 1,800 employees, and is still launching new brands there. Heineken calls the war a terrible human tragedy and says the company remains committed to leaving but, so far, has not secured Russian regulatory approval to sell its assets.

Also on the list, Mondelez, the company that makes Oreos among other things. With 3,000 employees and products still moving in Russian markets, the company is being boycotted by some Europeans, even as it said in a statement last month it is scaling back in Russia.

And there are more. Unilever has called the war brutal and senseless. Philip Morris has said the situation is complex. Nestle, last year, pledged to sell only essential items but Yale researchers say non- essential items are still being sold. And all of those companies continue doing business with the Russians.

Many suggest divesting themselves from Russia is more costly and complicated than outsiders might imagine, and they don't want to hurt their Russian employees. Sonnenfeld's response --

SONNENFELD: The whole point of the sanctions and the business exits is to put pressure on the average Russian so that the humanitarian thing is to motivate them to act.

FOREMAN (on camera): Many of these companies online say they really do stand with the Ukrainians. They've donated money to Ukrainian causes. But critics like Sonnenfeld and others say you got a lot of good press by saying you would also stand against the Russians, and now it's time to pay up.

Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

SOLOMON: And any moment now we expect to hear from Ukraine's President Volodymyr Zelenskyy and NATO Secretary General Jens Stoltenberg.

CNN's Nic Robertson live in London for us. Nic, look, both men have a part to play. You argue Stoltenberg is celebrating the Sweden news but Zelenskyy notably very upset about what appears to be a lack of a firm timeline for Ukraine's membership into NATO.

What are we expecting to hear from both of these leaders?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, Zelenskyy sounded pretty outraged yesterday. He is setting a different tone this morning and saying he's got three things on his agenda. One is getting more military packages. The other is getting that NATO invitation. And the third one is security guarantees until the NATO invitation arrives. So that's kind of how his day is structured.

Those military packages are coming in the form of these bilateral meetings it is having this morning ahead of meeting with Stoltenberg. He has met with the British prime minister, the Canadian prime minister, the Australian prime minister, the German chancellor, and they're all offering up these military packages, which Zelenskyy sounds very happy to get.

[05:40:00]

He said in terms of getting the NATO invite, he wanted to get on the same page as everyone else. And he will get the opportunity to do that and put his views across the table at the NATO -- at the NATO-Ukraine Council -- the first meeting of its kind and designed to help bring NATO -- bring Ukraine slowly into NATO.

And then those security packages -- that's going to come out of the G7 meeting. Expecting a big statement there from the G7 leaders, with Zelenskyy on stage, where they'll talk about the security packages -- big security packages guaranteeing military aid for Ukraine going forward. Actually, they'll take the form of bilateral arrangements with these nations that will have to be worked out later. Aspirational details to come.

I think what we get from Stoltenberg is the consistency of NATO. We're united. We've made it easier for Ukraine to get into NATO. We've taken out this provision that creates additional hurdles. This membership action plan -- that's gone. Ukraine doesn't have to do that.

But I think the messaging here is going to be one of unity -- that we're working together -- and, of course, Stoltenberg will be pointing out the amount of military support that NATO nations are already giving to Ukraine and how important that is.

SOLOMON: So perhaps both sides leaving with something that they can call a win and Zelenskyy coming home presumably with some deliverables and NATO being able to say look, we are united with the whole Sweden situation being seemingly handled. Turkey coming into the fold and now Zelenskyy going home with something to tell the Ukrainian people as well.

Nic Robertson, great to have you today. Thank you.

And I should say we have not seen Zelenskyy just yet but we will, of course, continue to monitor that and bring that to you just as soon as we get it.

Turning to sports now, the National League's All-Star Game losing streak -- well, that's over thanks to one swing of the bat from an unlikely hero.

Carolyn Manno has this morning's Bleacher Report. Good morning.

CAROLYN MANNO, CNN SPORTS CORRESPONDENT: Hey, good morning.

Well, the All-Star Game is always memorable, right? We love to kind of gather around the TV and check out this moment. And last minute's 93rd -- last night, excuse me, 93rd edition of the Midsummer Classic -- no exception to that. This one had absolutely everything in Seattle -- defensive plays, catching, clutch-hitting. You name it, it had it.

Rockies catcher Elias Diaz had never been in an All-Star Game at 32 years old, after nine seasons in the Majors, but that didn't phase him at all. He erupted in a big way in the eighth inning, down by one, facing one of the best relievers in the game, Felix Bautista of the Orioles. And he crushes the ball deep into left field into the stands for the two-run shot. And that we enough to earn him MVP honors and the National League its first All-Star Game win since 2012.

And after the game he got a little bit emotional talking about his mother being there to see it all happen.

(BEGIN VIDEO CLIP)

ELIAS DIAZ, 2023 ALL-STAR GAME MVP (through translator): That was incredibly special for me, you know, to have her here. A lot of emotions. With everything that we've been through and all the sacrifices that she made for me, it was really special to have her here for me.

(END VIDEO CLIP)

MANNO: So sweet.

And the PGA Tour faced tough questions on Capitol Hill yesterday over the controversial deal with Saudi-backed LIV Golf. Tour officials told senators they had no choice but to merge in order for the tour to survive. Democratic lawmakers slamming the deal as a betrayal of American values.

(BEGIN VIDEO CLIP)

SEN. RICHARD BLUMENTHAL (D-CT): Today is about sports washing. It's also about hypocrisy. How vast sums of money can induce individuals and institutions to betray their own values and supporters or perhaps reveal a lack of values from the beginning. It's about other sports and institutions that could fall prey if their leaders let it be all about the money.

(END VIDEO CLIP)

MANNO: Documents obtained by the Senate Investigation Subcommittee revealing that several proposals that were suggested during the secret negotiations between the PGA Tour and Saudi Public Investment Fund were as follows.

Among them, that the PGA Tour wanted LIV Golf CEO Greg Norman to step down. Another proposal had Tiger Woods and Rory McIlroy, who were harsh critics of LIV Golf, actually owning LIV teams and playing in 10 events a year. And another proposal suggested giving the giving of the Saudi Public Investment Fund membership at the ultra-exclusive Augusta National Golf Club, the home of the Masters, and the Royal and Ancient Golf Club at St. Andrews in Scotland.

Now, it's important to note that even though that's very noteworthy, these are just proposals and the final details of that merger have yet to be worked out. But still fascinating stuff as this story continues to develop.

And everybody still buzzing about Elina Svitolina's fairytale run to the women's Wimbledon semi-final after being down for most of the opening set. The new mom upsetting world number one Iga Swiatek who fought back to take the match to a deciding set but ultimately, just could not match Svitolina's power-hitting, those heavy groundstrokes. It's actually the second time that the Ukrainian wildcard has made it this far at Wimbledon.

She's going to face another unseeded opponent, Marketa Vondrousova, in the semis tomorrow, who upset American Jess Pegula.

And I love what she said about this, Rahel. This is huge. I mean, to take down Iga Swiatek is incredible but she said I'm going to have a beer with my team. I'm going to relax. She's a new mom. Just had a baby nine months ago.

[05:45:05]

SOLOMON: I think she's earned it.

MANNO: Yes. She's like, then I'm going to dial in and hit the semis.

SOLOMON: Love it. She deserves it. She's earned it, I'm sorry to say.

Carolyn, thank you.

MANNO: Sure.

SOLOMON: All right. Coming up, hundreds of rescues in Vermont as rain turns streets into rivers and traps people in their homes. How much longer officials say the severe weather can continue ahead.

And next, right here, the road -- new read on inflation in America due in just a few hours. What we have been learning and hearing about consumer spending and credit cards. We'll discuss on the other side of the break.

(COMMERCIAL)

SOLOMON: Welcome back.

And looking at markets around the world, Asian markets are mixed, with the Hong Kong Hang Seng up about one percent. A different story for Tokyo and Shanghai. European markets, meantime, are higher by about one percent across the board.

Let's take a look at U.S. markets. U.S. markets look also up. Let's call it about half a -- a quarter of a percent across the three major averages.

[05:50:05]

U.S. stocks, meantime, closed higher on Tuesday with the Dow jumping more than 300 points ahead of the Consumer Price Index report that is set to be released in just a few short hours from now. It's a key indicator of where inflation and prices stand.

Let's bring in Ted Rossman. He is a senior industry analyst at Bankrate.com. Ted, good morning. Thanks for waking up to be with us.

So look, economists, this time around, expect a three percent increase in consumer prices. That would be lower than the four percent in May. It's a sign that we're on the right track.

But, Ted, in terms of what you see in the data with consumer spending and debt, what are you seeing?

TED ROSSMAN, SENIOR INDUSTRY ANALYST, BANKRATE.COM (via Webex by Cisco): We're seeing people starting to pull back on physical goods spending. We're seeing noticeable drops in how much people are spending on furniture and electronics, for example. Now, to be fair, some of that demand got pulled forward the past few years because people spent more time at home. Right now, the hottest spending categories have to do with

entertainment, travel, dining. It's really still a story about all this pent-up demand that stacked up during the pandemic.

SOLOMON: So when you say that people continue to spend on entertainment -- dining and that sort of thing -- that doesn't necessarily, to me at least, flash warning signs.

ROSSMAN: You're right. I mean, this is definitely not meeting the classic definition of recessionary or near-recessionary spending. We've been hearing for two years now that a recession is right around the corner.

I think the strong job market is a big part of this. Now, of course, that tends to be more of a lagging indicator than a leading one. But still, the fact that we have a very low unemployment rate in the mid- threes and wage growth has been pretty good, inflation has been weighing on people psychologically and with their wallets.

But I think that most people are keeping up. We're starting to see some warning signs with delinquencies, especially in the auto space. Credit card delinquencies are also going up and getting back towards 2019-ish levels. But a lot of people I think are doing better than we might think.

SOLOMON: I want to talk about student loans, for example. The New York Fed's household debt and credit Q1 report gave what I thought was some pretty interesting insight. So, mortgages make up the majority of debt across all ages -- sure -- it makes sense. But for people between the ages 18 and 39, it's student loans. That's a significant percentage.

Ted, what does this mean for you and for the economy, really, with payments set to resume in just a few short months -- in October?

ROSSMAN: It's definitely something I worry about. I think, really, a closely-related issue is credit card debt. Because the typical student loan payment is about $500 a month, so that's $500 that's not going to something else. Maybe not going to paying off the credit card.

And the fact that those rates are at record highs -- 20.55 percent on average -- we're already seeing record credit card debt loads. So I definitely worry about that either directly or indirectly.

SOLOMON: Yes.

ROSSMAN: More purchases are going on cards and it's just harder to pay them off.

SOLOMON: Yes -- 20.55, you say, is the average credit card rate.

And hard to believe, but we know that when then Fed meets in just a few short weeks they are expected to raise rates yet again. Not that it is necessarily one-to-one but they are still raising rates.

Ted Rossman, great to have you today. Thank you. ROSSMAN: Thank you.

SOLOMON: Well, Bank of America has been ordered to pay $250 million after federal regulators say that the bank violated consumer financial protection laws. The accusations include harming customers by double- dipping on fees, withholding credit card rewards, and opening fake accounts.

If you think you have been impacted by any of these violations officials say you don't need to actually take action. The bank is responsible for sending payments to anyone who is eligible.

Well, coming up on "CNN THIS MORNING" Ukrainian President Volodymyr Zelenskyy looking for assurances that his nation can one day join NATO. Will he get any when he meets with President Biden today?

And Republican Sen. Tommy Tuberville backtracking his statements on white nationalists. His latest comments coming up on "CNN THIS MORNING."

(COMMERCIAL)

[05:58:45]

SOLOMON: Welcome back.

Britney Spears says that she is ready to tell her story on her terms in her highly-anticipated new memoir.

(BEGIN VIDEO CLIP)

BRITNEY SPEARS, SINGER-SONGWRITER: Singing "(You Drive Me) Crazy."

(END VIDEO CLIP)

SOLOMON: Doesn't that give you such good nostalgia?

Her book is called "The Woman in Me." It comes after she successfully fought to end a 13-year court-ordered conservatorship. Simon & Schuster landed the rights to the book last year in what became a bit of a bidding war. The deal terms have not been revealed but reports say the deal is, quote, "record-breaking." The memoir is set to be released on October 24. A lot of people excited for that.

Our top of the morning, the top TV shows streaming right now.

(BEGIN VIDEO CLIP)

Clip from Netflix "THE WITCHER."

(END VIDEO CLIP)

SOLOMON: "THE WITCHER" is number one on Rotten Tomatoes' most popular list. Season three is out right now.

And here is number two. (BEGIN VIDEO CLIP)

Clip from FX Productions "THE BEAR."

(END VIDEO CLIP)

[06:00:00]

SOLOMON: "THE BEAR" has a 99 percent critics rating and a 92 percent audience rating. Season two is streaming right now.

And here is the number three spot.

(BEGIN VIDEO CLIP)

Clip from Apple TV+ "HIJACK."

(END VIDEO CLIP)

SOLOMON: And that is "HIJACK" starring Idris Elba. I've only seen "HIJACK" but I can tell you it's very, very good

Thanks for joining us. I'm Rahel Solomon in this morning for Christine Romans. "CNN THIS MORNING" starts right now.